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Centro puts litigation costs behind it

Carolyn Cummins, Commercial Property Editor

CENTRO RETAIL has identified about $1.2 billion of assets it could acquire from its syndicate business in the next three years, after it revealed an inaugural full-year loss of $228.4 million.

The result was affected by a $85.6 million settlement payment from a class action litigation, which started in 2008, and the $203.3 million provision to current Centro shareholders exposed to the litigation.

The chief executive of Centro, Steven Sewell, said excluding the one-offs, underlying earnings in the seven months to June 30 were $123.2 million. That enabled the group to distribute 6.5¢ per security.

Mr Sewell said the group's centres were performing well despite the weak retail conditions and he expected an underlying profit of between 15.3¢ and 15.6¢ per security for the 2013 financial year.

He said that in the space of six months Centro had reduced its gearing to 26 per cent, extended its $1.8 billion debt to beyond four years and boosted the register to more than 80 per cent of retail and institutional investors.

''Centro is now a one-dimensional, Australian-focused, shopping centre manager with no financial engineering,'' he said.

Before its restructure, Centro was one of the first companies to feel the economic crisis, when, in December 2007, the previous management confessed they could not pay $4 billion in debt due that month.

Since then, it has been rebuilt and now owns 41 shopping centres, valued at $6.6 billion. It has repaid remaining debt from the sale of a half-share in the Galleria in Perth, the Glen in Melbourne and the Colonnades centre in Adelaide to the private Perron Group.

''The company is clearly focused on five key aspects of the business. These include capital management, active portfolio and management of our centres and redevelopment,'' Mr Sewell said.